THE International Monetary Fund (IMF) has raised its concerns about Spain’s economy, saying ‘far-reaching’ reforms are needed to ensure its recovery.
It said the country faced ‘severe’ challenges, including the need to urgently reform a ‘dysfunctional’ labour market, and its banking sector.
Spain has 20 per cent unemployment.
The IMF made its comments after the Spanish government was forced to follow the British and US example and mount a central bank rescue operation to prevent the Cajasur Bank collapsing.
In fact, last week, Spain’s government passed austerity measures to cut its deficit, which the trade unions responded to by threatening to mount a general strike that would bring down the government.
However, the crisis is not ‘over there’ in Greece and Spain. It is a world crisis. The Spanish budget deficit is at 11 per cent of Spanish GDP smaller than the UK’s, which is over 12 per cent of UK GDP.
Last week, the Spanish government approved a 15bn euro austerity plan, including a five per cent cut to public sector salaries to reduce its deficit.
The IMF considers that Spain is already well down the Greek road and that general strike actions by the trade unions are just ahead.
In fact, the UK is not far behind Greece and Spain. Workers are now facing, as the Tory-Lib Dem savage cuts begin to take place, organising mass strike actions of revolutionary character to defend their jobs, wages and basic rights.
It was the fear that if Greece defaulted on its debt payments, that the contagion would spread to Spain, Portugal, Italy, Ireland and the UK, that stirred the 27 member states of the EU, at President Obama’s insistence, to agree an emergency fund of $1 trillion.
This sum included 440bn euros of loan guarantees for bankrupt EU states and 60bn euros of emergency EC funding. The remaining 250bn euros was from the IMF.
However, once this fund was advanced, it was seen to be the very last throw of the dice, since only two or three of the 27 EU states could back up the guarantee with cash.
This crisis has led to share crashes worldwide, and a disaster, in particular, for Wall Street and the UK stock market.
The Dow Jones index has fallen below 10,000 points, while the FTSE 100 index has lost 10 per cent of its share price, when all was felt to be getting back to normal, and is now below 5000 points.
The Asian stock markets are also in freefall, spurred by the crisis that has emerged over the South Korean charge that North Korea sank one of its naval craft.
Capitalist slumps do lead to wars, either to divide or reconquer areas, but this is a war that is panicking capitalists and bankers all over Asia and the US.
The South has called on its ally the US to give it the maximum political support, and military support if it is required.
North Korea borders China, along the Yalu River and is also very close to Vladivostok, the major Russian city and port.
Neither Russia nor China can stand idly by and watch North Korea being attacked by South Korea and the US.
An attack on the North will get an immediate response from the North Korean Peoples Army which has over a thousand artillery pieces targeting the South Korean capital Seoul, from just across the border.
No wonder the bankers and capitalists of South Korea, Japan and the US are nervous about just what is developing on the Korean peninsula.
All over the planet the crisis of capitalism and imperialism is driving forwards attacks by the bankers and the bosses on the working class, the poor and the oppressed, and the anti-imperialist nations.
The working class and the oppressed nations are responding with revolutionary actions from the Korean peninsula to the Middle East, and to the insurgent working class movements of Greece, the EU, the UK and the US.
The world crisis is driving forward the world socialist revolution. There has never been a better time for building sections of the International Committee of the Fourth International all over the planet.